IR4.0 could stimulate wide-ranging growth in Asean

IR4.0 refers to the fourth industrial revolution comprising the rapid expansion of technologies such as artificial intelligence (AI), 3D printing, blockchain technologies, robotics, IoT (Internet of Things), big data and cloud computing, among others. With the previous three revolutions, the global economy shifted from a predominantly agrarian economy in the 17th century to an industrial and knowledge-based economy in the 20th century.

The solutions of IR4.0 interconnect the real and virtual worlds to create cyber-physical systems. As an example, robotic and automation equipment from the physical world are combined with advanced algorithms and machine learning to create solutions such as self-learning robots. Similarly, conventional machinery, RFID technology and automation equipment interact with embedded systems, image processing,and cloud computing to create predictive maintenance solutions.

Decoupled, fully flexible and highly linked manufacturing systems have replaced strictly sequenced assembly lines in today’s automotive factories with IR4.0 capabilities. Mass customisation becomes a reality because flexible production and short lead times make mass customisation available at competitive prices.

This transformation is accelerated by the increase in the number of scientists, the processing capacity of chips and the development of advanced Internet technologies. These new technologies are already reshaping the socioeconomic environment and beginning to affect our lives, jobs, social connections, business models, industrial settings and governance systems, among others. In the future, it might even call into question what it means to be a human.

Prior to 2020, Asean’s GDP grew at an average of 5% each year. Economic activity had been severely disrupted by the ongoing pandemic, and growth took significant hit during 2020 and 2021. 

However, the economy has since rebounded. By 2025, further regional integration is predicted to increase growth to up to 7%. With the third-largest market in terms of population, of which 60% are under the age of 25, the region has tremendous growth potential. Asean launched the Asean Economic Community in 2015 in an effort to strengthen economic integration.

The potential for IR4.0 to alter economic systems and social structures has piqued the interest of regional stakeholders.

IR4.0 presents enormous opportunities for the Asean region, which would stimulate wide-ranging growth in the region. Consumer options will multiply as higher-quality goods are created at reduced costs. 

People will be able to connect and receive a variety of services in novel ways. Accessing new sources of information (news, market prices), education (online, virtual) and healthcare (health check strips, telemedicine) will be simpler and more enjoyable. 

The transformation in business would usher in a world of micro-transactions. SMEs (small and medium enterprises) will find funding more easily with blockchain technology since parties may transact with trust, even if they have never met. 

The distributed ledger eliminates the middleman, allowing transactions to be completed more quickly. The technology has the potential to integrate distributed energy and water systems in the region.

More advanced e-banking would lessen the need for new physical banks to be established. There may come a time when the requirement for a physical bank is no longer necessary. 

Drones powered by solar energy could carry supplies to remote locations. In Indonesia, solar-powered balloons are used to provide Internet connections. This allow Internet connectivity to be available in the most remote regions. 5G technology will provide a significant boost to on-demand autonomous cars, such as the one currently being tested in Singapore.

However, the new technology does carry some risks. Low-skilled, repetitive jobs will face an immediate threat. According to the International Labour Organisation, automation might threaten 56% of jobs in Cambodia, Thailand, Vietnam, Indonesia and the Philippines.

IR4.0 may hasten the return to skills and information. Consequently, inequalities may rise again between nations, reversing earlier progress. Robotics and AI will reduce the ability of several Asean nations to compete on price (ie Vietnam, Thailand).

The risk of a cyberattack multiplies as more devices are connected to the Internet. To tackle this, Asean has not yet developed clear policies.

Although tackling difficult problems will continue to be an important ability for IR4.0, critical thinking and creativity will take precedence over people management. Knowledge or technology managers will therefore be in high demand.

While organisations and skills are evolving slowly, technology is moving forward swiftly. In addition, the chasm between the quickening speed of technological advancement and the slower rate of human growth will widen significantly over the next few decades. This is the grand challenge for our times.

Dr Sameer Kumar has a PhD in Social Networking and is presently working as an associate professor at the Asia-Europe Institute, Universiti Malaya.

Article was first published at The Malaysian Reserves.